Should you buy now or wait until the market cools off?

If you’re thinking of buying in 2021 (or have already made a purchase), you’re aware of how insanely hot the market is right now. We’re seeing homes fetch multiple offers and sell in a matter of days. It’s difficult just to even show a house, let alone get an offer accepted. It’s normal to think about taking a step back and wait until the end of summer or the end of the year to buy, so let’s take a look at that exact scenario.

Prices in the San Fernando Valley are rising 2% to 3% per month, and the median price for a single-family home in Los Angeles County is about $850,000. This means every month you wait to buy, the average home increases in price by $17,000. In just six months, you’d be looking at over $100,000 extra in equity. To be honest with you, I don’t see this train stopping anytime soon. Interest rates have ticked upward slightly, but inventory won’t change and demand is still out there. Buyers can still afford to buy. So ask yourself: If houses are rising in price by $100,000 or more, does it still make sense to wait six months to buy? Even if you can save up a little extra during that time for the down payment, the answer will likely be no.

“To be honest with you, I don’t see this train stopping anytime soon.”

Here’s another common question buyers ask me: Does it make sense for me to pay top dollar for a house? To answer that question, let me give you a personal example. My family bought a home in this market not too long ago, and we paid the most in the neighborhood for it. You know what? It was a little scary. At the time, I couldn’t believe we paid that amount. After a few months, though, someone else paid a higher price for another home. Using the numbers from above, if you buy a home for $850,000, someone else will be buying a home a month later for $867,000. A month after that, someone else will pay $884,000 for another home. After six months to a year, buyers will be purchasing homes for $950,000 to $1 million. After all that time, paying $850,000 for a home won’t seem so bad.

So again, unless outstanding circumstances are forcing you to wait, it probably makes more sense for you to buy now in this marketplace. Yes, it’s crazy. Yes, it’s frustrating. Yes, you’ll probably have to submit offers on multiple homes before one of them gets accepted. Don’t give up, though. Right now is a great time to buy, so get out there and take advantage of these low interest rates.

If you’d like help finding a home or there’s anything else I can assist you with, don’t hesitate to reach out to me. I’d love to hear from you.